The construction industry can expect little growth in the next two years, according to trade body the Construction Products Association.
The CPA predicts a sharp decline in private sector investment this year and next, and says industry growth will fall to 3.7% this year, dropping to 0.6% next.

Output growth was expected to have increased more than 7% last year, the highest rate of growth since 1988.

The industry is expected to pick up slightly in 2005, when growth is predicted to be 1.3%.

Michael Ankers, chief executive of the CPA, said public-sector spending ought to arrest further decline in output.

The figures should allay any fears that the industry will not have the capacity to deliver

Michael Ankers, chief executive, CPA

Ankers added that the slowdown in commercial work would free up resources for the government's capital spending programme.

He said: "These figures should allay any fears that the industry will not have the capacity to deliver the government's investment programme – and, indeed, demonstrate that this is a good time for the government to invest in the much-needed improvements to the infrastructure and built environment of this country."

Business adviser PKF also said small and medium-sized enterprises in construction are in for a tough year.